“Time is our most precious commodity. We only have a certain amount, it is more valuable than anything we can posses, it is more valuable than anything we can give. Each of us only has a certain amount, and every moment that amount decreases. Our time is a finite resource, it is irreplaceable, it will run out, and there is no way we can ever obtain more. Therefore we must spend our time wisely!”
—SeanLower Commodity Prices Reduced Wholesale Igp-Di ! http://newish.info/198504-lower-commodity-prices-reduced-wholesale-igp-di
Lower Commodity Prices Reduced Wholesale Igp-Di ! http://newish.info/198502-lower-commodity-prices-reduced-wholesale-igp-di
“The value of commodities is the very opposite of the coarse materiality of their substance, not an atom of matter enters into its composition. Turn and examine a single commodity, by itself, as we will, yet in so far as it remains an object of value, it seems impossible to grasp it. If, however, we bear in mind that the value of commodities has a purely social reality, and that they acquire this reality only in so far as they are expressions or embodiments of one identical social substance, viz., human labour, it follows as a matter of course, that value can only manifest itself in the social relations of commodity to commodity.”
—Karl Marx, Capital I
“A consequence of this alienation of humans from their own nature is that they are also alienated from each other. Productive activity becomes ‘activity under the domination, coercion and yoke of another man’. This other man becomes an alien, hostile being. Instead of humans relating to each other co-operatively, they relate competitively. Love and trust are replaced by bargaining and exchange. Human beings cease to recognize in each other their common human nature; they see others as instruments for furthering their own egoistic interests.”
—From Peter Singer’s A Very Short Introduction on Karl Marx.
“To this end the reserve army of the unemployed is enlisted into the tertiary or “service” sector, reinforcing the troops responsible for distributing and glorifying the latest commodities; and in this it is serving a real need, in the sense that increasingly extensive campaigns are necessary to convince people to buy increasingly unnecessary commodities.”
—Guy Debord, The Society of the Spectacle (1967)Commodity sell-off hits star hedgies' track records
Funds like Mike Coleman’s Merchant Commodity fund and Willem Kooyker’s Blenheim Capital sit on hefty double-digit losses for the year after investors worried about global economic growth recently dumped gold, copper and cocoa for less-risky assets.And Astenbeck, the $2 billion hedge fund founded by famed oil bull Andy Hall, lost around 18 percent of its value in September — far more than last month’s 11 percent drop in Brent crude, the London benchmark used now by most oil investors and traders.The Reuters-Jefferies CRB index of 19 commodities .CRB shed 13 percent during September, a drop which has echoes of May when many star managers betting on rising prices were caught on the hop by a quick sell-off.The size of the September hit, on top of losses suffered earlier this year, means many managers who enjoyed bumper profits from the long commodity bull run now face the likelihood of a down year.The average hedge fund investing in the Energy and Basic Materials sectors has slid 15.5 percent this year to end-September, making it the worst-performing strategy as measured by Hedge Fund Research’s HFRI index.”Some commodity hedge funds have struggled due to their markets trading more in line with risk appetite than supply-demand characteristics — with concerns over the sovereign debt crisis overshadowing fundamentals — and lacking clear direction,” said Credo Capital’s head of research Gemma Godfrey.”Oil, for example, has seen more than 10 percent swings in a week, whilst trending sideward. This also spooked some managers to cut positions ahead of strong rallies.”Brent crude lost around 7 percent last quarter, while London copper lost more than a fifth to end last month near 14-month lows.Even gold, which had gained about a third this year and provided one of the most profitable trades for many managers, subsequently slumped more than 10 percent in September.TRACK RECORDS TARNISHEDThe losses from commodities also come in a year that is tarnishing some star managers’ records across the industry.John Paulson, seen by some as making the greatest ever trade when he bet against subprime debt in 2007, is down 47 percent in his Advantage Plus fund.The $1.1 billion Merchant Commodity Fund, a fundamentally-driven commodity long-short fund run out of Singapore, lost 5.4 percent last month, said a source who saw the performance data.This leaves the fund — which was profitable in each of the past seven years and which racked up annual gains of more than 30 percent in 2005, 2006 and 2007 — down 36 percent this year, manager Mike Coleman told Reuters, although he declined to comment on reasons for the losses.BlueGold Global Fund, run by the firm’s chief investment officer Pierre Andurand, is down 0.4 percent last month to September 16, according to figures seen by Reuters, leaving it 25 percent in the red for the year.And Willem Kooyker’s Blenheim Capital Management, a New Jersey based fund estimated in May to manage $5 billion, and a big commodities investor, lost 15.5 percent in September and is down 25 percent in 2011, a person familiar with the fund said.Andy Hall’s Connecticut-based fund Astenbeck is down more than 5 percent year-to-date, after September’s double-digit loss, sources familiar with the fund’s performance said.Commodities giant Armajaro, co-founded by coffee and cocoa trader Anthony Ward, saw its flagship Commodities fund fall more than 5 percent last month to September 23, taking year-to-date losses to more than 7 percent, according to figures seen by Reuters.The firm’s Emerging Markets fund, a macro fund betting on equities, derivatives and fixed income, has also suffered in 2011’s sell-off, losing 14.4 percent this year.A spokesman for the firm, which manages $2.2 billion in assets, declined to give reasons for the performanceStar commodities trader Paul Touradji’s $840 million Global Resources Offshore fund was down 17.5 percent this year to end-August, according to figures seen by Reuters. Last month Touradji said he would return to full-time trading to try and save his fund from its first-ever annual loss.A spokesman for Touradji declined to comment.Not all funds were stung by September’s sell-off — some were able to profit from falling prices.Clive Capital, the $4 billion London-based hedge fund firm set up by Chris Levett, jumped 11.5 percent in September after taking a bearish position on commodities, two people who have seen the numbers said. This leaves the fund down 1.4 percent in 2011. Clive Capital declined to comment.
Premium or Commodity: The 1st Battleground for Brand Mobile Ad Spend
So here’s an interesting and, ultimately, positive development. Digiday reports that many leading US publishers are resisting turning over their mobile inventory to ad networks and selling it directly.
The main reasons seem to be understandable distaste at sharing mobile ad revenue and the fight to protect price premium against a commoditization of inventory.
Networks, blind or partially blind networks especially, fuel a race to bottom in inventory pricing. Whether through CPM or CPC/CPA models, theirs is a volume business. The most inventory sold wins and winning that game means offering the lowest, still viable, price.
Because there’s currently an over-supply of mobile inventory (read: advertisers aren’t keeping up with consumers) networks often fail to deliver on promises to spike publisher fill rates because they sign up as many partners as they can and need to spread the love around.
The other problem for premium publishers is that many of those network advertisers are smaller app shops or other commodity mobile content advertisers that lack the brand cache that “premium” publishers like to see on their sites & apps.
The article goes on to point out a couple things that I agree are legitimate challenges for the mobile advertising space:
- Mobile needs to be easier to buy.
- Agencies like networks for the single-source execution.
Now there are many reasons that’s true. Some of which are addressed below and others include the dynamics of media buying (and that’s a whole other complicated discussion).
There’s some other things to consider as well:
- Mobile, though rapidly growing, still needs to address questions or reach & scale. The audience is clearly attractive to advertisers but it just doesn’t offer the same reach as proven + established channels such as online, email, broadcast etc…This goes back to the appeal of single source buys.
- Measurement is still evolving so lower prices and bigger reach allow brands and agencies to justify “trial” spends without having to deliver as rigorous reports.
The ability of publishers to protect price premiums and nurture further big brand spend depends on a couple of things:
- Advancing audience reporting & targeting, inventory targeting and campaign measurement. All are in their infancy and inconsistent at best currently.
- Providing high touch ad experiences such as the ability to do custom and highly engaging rich media experiences. For us in Canada, this often involves providing some level of production support.
- Establishing and uniformly adopting standards for ad units.
- Continuing to educate about campaign and creative best practices and becoming a valuable resource to agency/brand partners vs. just an order taker.
This is a topic I’m invested in daily. I expect I’ll be back to each of these items soon and regularly.
